Sh. Bhagwan Agarwal, Agra V. I.T.O., Ward-2(4), Agra

MA 2/AGR/2011

• Counselvise Citation: [2011] 123 COUNSELVISE.COM (IT) 6516 (ITAT-AGRA)
• Duration Of Justice: 6 month(s) 3 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 28-07-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 15-07-2011
• Assessment Year: 2001-2002
• Appeal Filed On: 24-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: K G AGARWAL
• Keywords: Reasonable cause
• Section: 263; 12; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE SHRI P.K. BANSAL, ACCOUNTANT MEMBER AND SHRI H.S. SIDHU, JUDICIAL MEMBER M.A. NO. 02/AGRA/2011 (IN ITA NO. 468/AGRA/2004) ASSTT. YEAR : 2001-02 SHRI BHAGWAN AGARWAL, VS. INCOME-TAX OFFICER, D-31, PRATAP NAGAR, AGRA. 2(4), AGRA. (APPELLANT) (RESPONDENT) FOR APPELLANT : SHRI K.G. AGARWAL, C.A. FOR RESPONDENT : SHRI VINOD KUMAR, JR. D.R. ORDER PER P.K. BANSAL, A.M. : THIS MISCELLANEOUS APPLICATION HAS BEEN FILED BY THE ASSESSEE U/S. 254(2) OF THE INCOME- TAX ACT IN ITA NO. 468/AGRA/2004 WHICH WAS DECIDED BY THE TRIBUNAL VIDE ORDER DATED 27.04.2007. 2. THE LEARNED AR CONTENDED THAT THE ASSESSEE HAS C OME IN APPEAL AGAINST THE ORDER OF CIT(A) SUSTAINING THE PENALTY IMPOSED U/S. 271(1)(C ) OF THE ACT. THE ASSESSING OFFICER IMPOSED THE PENALTY U/S. 271(1)(C) HOLDING THAT THE ASSESSE E HAS COMMITTED THE DEFAULT WITHOUT REASONABLE CAUSE IN CONCEALING THE INCOME AND FURNISHING INACC URATE PARTICULARS OF HIS INCOME. THE CIT(A) CONFIRMED THE ORDER OF THE ASSESSING OFFICER. THE A SSESSEE WENT IN APPEAL BEFORE THE TRIBUNAL. BEFORE THE TRIBUNAL, THE ASSESSEE HAS TAKEN THE PLE A THAT THE PENALTY IMPOSED IS NOT LEGAL, AS THE SPECIFIC DEFAULT/OFFENCE WAS NOT POINTED OUT. THE A SSESSING OFFICER TOOK THE VIEW THAT THE ASSESSEE HAS CONCEALED THE INCOME AND FURNISHED INA CCURATE PARTICULARS OF INCOME. THE ASSESSEE CONTENDED BEFORE THE TRIBUNAL THAT SPECIFIC CHARGE FOR CONCEALMENT OF INCOME OR FURNISHING OF 2 INACCURATE PARTICULARS OF INCOME MUST BE SPELT OUT BY THE ASSESSING OFFICER. THE TRIBUNAL DID NOT CONSIDER THIS PLEA TAKEN BY THE ASSESSEE. EVEN THE ASSESSEE HAS ALSO SUBMITTED THE DECISION OF AGRA BENCH IN THE CASE OF MAHESH CHAND GUPTA VS. IT O 4(2), AGRA IN ITA NO. 118/AGRA/2005, THE COPY OF WHICH IS FILED IN THE PAPER BOOK ALSO, WHICH IS AVAILABLE AT PAGES 62 TO 67. THE ASSESSEE HAS ALSO SUBMITTED THE DECISION SUPPORTING HIS PLEA , MAINLY THE DECISION OF GUJARAT HIGH COURT IN THE CASE OF CIT VS. MANU ENGINEERING WORKS, 122 ITR 306 (GUJ) AND THAT OF GAUHATI HIGH COURT IN THE CASE OF PADMA RAM BHARALI , 110 ITR 54 (GAUHATI). THE DECISION OF THE GUJARAT HIGH COURT IN THE CASE OF MANU ENGINEER ING WORKS, 122 ITR 306 WAS DULY APPROVED BY THE GUJARAT HIGH COURT IN THE SUBSEQUENT JUDGEME NT IN THE CASE OF NEW SORATHIA ENGINEERING CO. VS. CIT, 282 ITR 642 (GUJ). EVEN THE DECISION OF GUJARAT HIGH COURT IN THE CASE OF CIT VS. LAKHDIR LALJI, 85 ITR 77 (GUJ.) WAS ALSO NOT CONSID ERED IN WHICH IT WAS HELD THAT IF THE PROCEEDINGS ARE INITIATED ON THE CHARGE OF CONCEALM ENT, PENALTY CANNOT BE LEVIED ON THE CHARGE OF FURNISHING OF INACCURATE PARTICULARS OF INCOME AND VISE VERSA. THE A.O. SHOULD HAVE GIVEN SPECIFIC FINDING ABOUT THE CHARGE OF THE PENALTY. THE AFFIDAVIT TO THAT EXTENT WAS ALSO FILED BEFORE US. REFERRING TO THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. RELIANCE PETROPRODUCTS PVT. LTD., 322 ITR 158 (SC), IT WAS POINTED OUT THAT BOTH THE OFFENCES I.E. CONCEALMENT OF PARTICULARS OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME HAVE DIFFERENT MEANINGS. IN BOTH THE OFFENCES ONE THING , I.E. PARTICULARS OF INCOME, IS COMMON. IF THE PARTICULARS ARE FOUND TO BE INACCURATE, THE LIABILI TY FOR THE PENALTY ARISES. SIMILARLY, IF THE ASSESSEE HAS CONCEALED PARTICULARS, THERE MAY BE LI ABILITY TOWARDS THE PENALTY. IF THE ASSESSEE HAD MADE EXPLANATION AND IF THE EXPLANATION OF THE ASSE SSEE IS NOT ACCEPTED BY THE A.O., THE EXPLANATION GIVEN BY THE ASSESSEE PER SE DOES NOT B ECOME TO BE A FALSE EXPLANATION. THEREFORE, THE A.O. SHOULD HAVE GIVEN A CLEAR CUT FINDING WHET HER THE ASSESSEE HAS CONCEALED THE PARTICULARS 3 OF INCOME OR FURNISHED INACCURATE PARTICULARS OF IN COME. EXPLANATION 1 TO SECTION 271(1)(C) IS APPLICABLE IN THE CASE OF CONCEALMENT OF PARTICULAR S OF THE INCOME NOT IN THE CASE OF FURNISHING OF THE INACCURATE PARTICULARS OF INCOME. THE PLEA TAK EN BY THE ASSESSEE WAS NOT AT ALL CONSIDERED BY THE TRIBUNAL AND NON-CONSIDERATION OF SUCH LEGAL PL EA SUPPORTED BY THE CASE LAW TANTAMOUNTS TO BE A MISTAKE APPARENT ON RECORD. IN THIS REGARD, T HE LD. A.R. VEHEMENTLY RELIED ON THE DECISION OF ACIT VS. SAURASHTRA KUTCH STOCK EXCHANGE LIMITED, 2 62 ITR 146 (GUJ.) WHICH WAS DULY CONFIRMED SUBSEQUENTLY BY THE HONBLE SUPREME COURT IN THE CASE OF ACIT VS. SAURASHTRA KUTCH STOCK EXCHANGE LIMITED, 305 ITR 227 (SC). REFERRIN G TO PAGE 155 OF THE JUDGEMENT, IT WAS POINTED OUT THAT THE HONBLE HIGH COURT HAS HELD TH AT THE PROPOSITION THAT THE CONTENTION HAS BEEN RAISED BY THE PARTY BUT NOT DEALT WITH BY THE TRIBUNAL SHOULD BE HELD TO HAVE BEEN NEGATIVE IS CORRECT ONLY UPTO A STAGE. ONCE A PARTY BRINGS TO THE NOTICE OF THE TRIBUNAL THAT AN IMPORTANT POINT OR CONTENTION RAISED BY THE PARTY HAS NOT BEE N DEALT WITH IT WOULD BE WITHIN THE JURISDICTION AND POWER OF TRIBUNAL TO DECIDE WHETHER THE SAME CO NSTITUTE A MISTAKE APPARENT FROM RECORD AND THEREAFTER IF NECESSARY, REOPEN THE APPEAL. IT WAS POINTED OUT THAT SUCH POWER IS INHERENT IN THE TRIBUNAL. RELIANCE WAS ALSO PLACED ON THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF ITO VS. ITAT, 58 ITR 634 (ALLD.) IN WHICH IT WAS HE LD THAT WHERE, IN A JUDGEMENT OR ORDER OF THE APPELLATE TRIBUNAL, AN ERROR HAS CREPT IN, NOT AS A RESULT OF ANY FAULT OF THE ASSESSEE, BUT ATTRIBUTABLE ENTIRELY TO THE TRIBUNAL IN HAVING LOS T SIGHT OF A MATERIAL FACT AT THE TIME OF WRITING I TS ORDER OR JUDGEMENT, WHICH FACT WAS DULY BROUGHT TO ITS NOTICE BY THE ASSESSEE, THERE WOULD BE AN ERROR APPARENT FROM THE RECORD WHICH COULD BE RECTI FIED UNDER SECTION 35 OF THE INDIAN INCOME- TAX ACT. RELIANCE WAS ALSO PLACED IN THIS REGARD O N THE FOLLOWING JUDGMENTS :- UDHAVDAS KEWALRAM VS. CIT, 66 ITR 462 (SC) K. ASHAN KOYA & SONS VS. CIT, 172 ITR 677 (KERALA) 4 CIT VS. ITAT, 172 ITR 158 (M.P.) CIT VS. RAMESH CHAND MODI, 249 ITR 323 (RAJ.) DR. HARENDRA KUMAR GUPTA VS. ITO IN ITA NO. 125 TO 128/AGRA/2003. 3. IT WAS ALSO POINTED OUT THAT IN THE CASE OF HANU MAN RAM AUDAN RAM VS. CIT, 110 ITR 712 , IT WAS HELD THAT THE ORDER OF THE TRIBUNAL WA S VITIATED ON ACCOUNT OF NON-CONSIDERATION OF THE EVIDENCE BROUGHT TO THE KNOWLEDGE BY THE ASSESS EE. 4. RELIANCE WAS ALSO PLACED ON THE DECISION OF ITAT DATED 30.09.2008 IN THE CASE OF SHRI DINESH KUMAR JAIN IN ITA NO.314/AGR/2005 WHEREIN AT PARA-D OF PAGE 11 OF THE ORDER THE HONBLE TRIBUNAL HAS OBSERVED AS UNDER :- IN FACT THE HONBLE SUPREME COURT AND VARIOUS HIGH COURTS HAVE BEEN ALL ALONG HOLDING THAT IT IS A TIME OF ITAT TO CONS IDER ALL THE EVIDENCES IN FAVOUR OF AND AGAINST THE ASSESSEE. IN THIS REGARD REFERE NCE CAN BE MADE TO THE FOLLOWING JUDGMENT SHRI UDHAVDAS KEWALRAM, 66 ITR 462 SUPREME COURT WHEREIN IT HAS HELD THAT IT IS OBLIGATORY FOR THE ITAT TO CONSIDER ALL RELEVANT FACTS AND GIVE ITS FINDINGS ON ALL PLEAS RAISED IN THE LIGHT OF THE EV IDENCES AND APPLICATION OF LAW. 5. RELIANCE WAS ALSO PLACED ON THE DECISION OF JURI SDICTIONAL HIGH COURT IN THE CASE OF LAXMI ELECTRONIC CORPORATION LTD. VS. CIT, 188 ITR 398 (ALL.). THUS, IT WAS CONTENDED THAT THE ORDER OF THIS TRIBUNAL PASSED ON 27.04.2007 IS MERG ED WITH MISTAKE APPARENT ON RECORD AND REQUIRES RECTIFICATION AS THE LEGAL CONTENTION OF T HE ASSESSEE HAS NOT BEEN CONSIDERED. THE CASE LAW RELIED ON BY THE ASSESSEE WERE ALSO NOT CONSIDE RED AND EVEN THE JUDGMENT OF THIS TRIBUNAL, BY WHICH THE CASE OF THE ASSESSEE WAS COVERED WAS NOT CONSIDERED. THE ORDER, THEREFORE, MUST BE RECTIFIED. 5 6. LD. D.R., ON THE OTHER HAND, HAS TAKEN A PLEA TH AT THE TRIBUNAL HAS CONSIDERED ALL THE SUBMISSIONS AND THE ARGUMENTS TAKEN BY THE ASSESSEE . THE NORMAL PRINCIPLE OF LAW IS THAT ONCE THE COURT OR TRIBUNAL PRONOUNCES A JUDGEMENT/ORDER, THE JUDGEMENT/ORDER IS FINAL AND CANNOT BE ALTERED, CHANGED, VARIED OR MODIFIED. THE ITAT IS A TRIBUNAL CONSTITUTED UNDER THE INCOME-TAX ACT ITSELF, IT IS NOT A COURT HAVING PLENARY POWERS , BUT A STATUTORY AUTHORITY FUNCTIONING UNDER THE INCOME-TAX ACT 1961. IT, THEREFORE, CANNOT GO OUTS IDE OR DE HORS THE INCOME-TAX ACT NOR CAN EXERCISE POWERS NOT EXPRESSLY AND SPECIFICALLY CONF ERRED BY LAW. THE POWER OF REVIEW IS NOT ENTRUSTED WITH THE TRIBUNAL. A RIGHT TO SEEK REVIE W OF AN ORDER IS NEITHER A NATURAL NOR A FUNDAMENTAL RIGHT OF AN AGGRIEVED PARTY. LAW MUST CONFER SUCH POWER. IF THERE IS NO POWER ENTRUSTED WITH THE TRIBUNAL, THE ORDER CANNOT BE RE VIEWED BY THE TRIBUNAL. 7. WE HAVE CAREFULLY CONSIDERED THE RIVALS SUBMISSI ONS AND PERUSED THE MATERIAL ON RECORD ALONG WITH THE ORDER OF THE TRIBUNAL AND NOTED THAT THE ASSESSEE HAS CHALLENGED THE IMPOSITION OF THE PENALTY BEFORE THE TRIBUNAL UNDER SECTION 271(1 )(C). THE TRIBUNAL VIDE ITS ORDER DATED 27.04.07 HAS UPHELD THE IMPOSITION OF THE PENALTY U NDER SECTION 271(1)(C) OF THE ACT. SECTION 252 OF THE ACT PROVIDES FOR CONSTITUTION OF THE ITA T BY THE CENTRAL GOVERNMENT CONSISTING OF AS MANY JUDICIAL AND ACCOUNTANT MEMBER AS IT THINKS FI T TO EXERCISE THE POWER AND DISCHARGE THE FUNCTIONS CONFERRED ON SUCH TRIBUNAL UNDER THE ACT. IT ALSO PROVIDES FOR QUALIFICATION OF MEMBERS. IT ENACTS THAT THE CENTRAL GOVERNMENT SHA LL ORDINARILY APPOINT A JUDICIAL MEMBER OF THE TRIBUNAL TO BE THE PRESIDENT THEREOF. SECTION 253 ENABLES AN ASSESSEE AGGRIEVED BY ANY OF THE ORDERS MENTIONED IN THE SAID SECTION TO APPEAL TO T HE TRIBUNAL. SECTION 254 DEALS WITH ORDERS PASSED BY THE TRIBUNAL AND IS RELEVANT FOR THE PURP OSE OF CONTROVERSY RAISED IN THE M.A. BEFORE US. THIS SECTION READS AS UNDER :- 6 254. ORDERS OF APPELLATE TRIBUNAL. (1) THE APPE LLATE TRIBUNAL MAY, AFTER GIVING BOTH THE PARTIES TO THE APPEAL AN OPPORTUNIT Y OF BEING HEARD, PASS SUCH ORDERS THEREON AS IT THINKS FIT. (2) THE APPELLATE TRIBUNAL MAY, AT ANY TIME, WITHIN FOUR YEARS FROM THE DATE OF THE ORDER, WITH A VIEW TO RECTIFYING AN Y MISTAKE APPARENT FROM THE RECORD, AMEND ANY ORDER PASSED BY IT UNDER SUB-SECT ION (1), AND SHALL MAKE SUCH AMENDMENT IF THE MISTAKE IS BROUGHT TO ITS NOTICE B Y THE ASSESSEE OR THE ASSESSING OFFICER : .. (4) SAVE AS PROVIDED IN SECTION 256, ORDERS PASSED BY THE APPELLATE TRIBUNAL ON APPEAL SHALL BE FINAL 8. SECTION 254(2) LAYS DOWN THAT THE TRIBUNAL MAY, AT ANY TIME WITHIN FOUR YEARS FROM THE DATE OF THE ORDER, WITH A VIEW TO RECTIFYING ANY MI STAKE APPARENT FROM THE RECORD SUO MOTU CAN RECTIFY SUCH MISTAKE. THE TRIBUNAL CAN ALSO RECTIF Y SUCH MISTAKE IF IT IS BROUGHT TO THE NOTICE OF THE TRIBUNAL BY THE ASSESSEE OR THE A.O. THUS, THE RE ARE TWO SITUATIONS UNDER WHICH AN ORDER UNDER SECTION 254(2) CAN BE PASSED. THE TRIBUNAL C AN ITS OWN AT ANY TIME WITHIN 4 YEARS RECTIFY ANY MISTAKE APPARENT FROM RECORD. IN CASE SUCH A MI STAKE IS BROUGHT TO THE NOTICE OF THE TRIBUNAL EITHER BY THE ASSESSEE OR BY THE A.O., THE TRIBUNAL IS BOUND TO RECTIFY SUCH MISTAKE. THUS, THE TRIBUNAL HAS THE POWER TO RECTIFY THE MISTAKE IF TH ERE IS A MISTAKE APPARENT ON RECORD WITHIN THE FOUR CORNERS OF THE SAID PROVISION. THE MAIN QUEST ION, THEREFORE, IS : WHAT IS A MISTAKE APPARENT FROM THE RECORD. SIMILAR EXPRESSION ERROR APPARE NT ON THE FACE OF THE RECORD CAME UP FOR CONSIDERATION BEFORE THE COURTS WHILE EXERCISING CE RTIORARI JURISDICTION UNDER ARTICLES 32 AND 226 OF THE CONSTITUTION. IN T.S. BALARAM, ITO VS. VOLK ART BROTHERS, 2 SCC 526, IT WAS HELD THAT ANY MISTAKE APPARENT FROM THE RECORD IS UNDOUBTEDLY N OT MORE THAN THAT OF THE HIGH COURT TO ENTERTAIN A WRIT PETITION ON THE BASIS OF AN ERROR APPARENT ON THE FACE OF THE RECORD. IT WAS, HOWEVER, CONCEDED IN ALL LEADING CASES THAT IT IS V ERY DIFFICULT TO DEFINE AN ERROR APPARENT ON THE FACE OF THE RECORD PRECISELY, SCIENTIFICALLY AND W ITH CERTAINTY. IN THE CASE OF HARI VISHNU 7 KAMATH VS. SYED AHMAD ISHAQUE, 1 SCR 1104, THE CONS TITUTION BENCH OF THE SUPREME COURT QUOTED THE OBSERVATIONS OF CHAGLA C.J. IN BATUK K. VYAS VS. SURAT BOROUGH MUNICIPALITY, ILR 1953 BOM 191; AIR 1953 BOM 133, THAT NO ERROR CAN B E SAID TO BE APPARENT ON THE FACE OF THE RECORD IF IT IS NOT MANIFEST OR SELF-EVIDENT AND RE QUIRES AN EXAMINATION OR ARGUMENT TO ESTABLISH IT. THE COURT IN THE SAID JUDGEMENT ADMITTED THAT THOUG H THE SAID TEST MIGHT APPLY IN A MAJORITY OF CASES SATISFACTORILY, IT PROCEEDED TO COMMENT THAT THERE MIGHT BE CASE IN WHICH IT MIGHT NOT WORK IN AS MUCH AS AN ERROR OF LAW MIGHT BE CONSIDERED B Y ONE JUDGE AS APPARENT, PATENT AND SELF- EVIDENT, BUT NIGHT NOT BE SO CONSIDERED BY ANOTHER JUDGE. THE COURT, THEREFORE, CONCLUDED THAT AN ERROR APPARENT ON THE FACE OF THE RECORD CANNOT BE DEFINED EXHAUSTIVELY THERE BEING AN ELEMENT OF INDEFINITENESS INHERENT IN ITS VERY NATURE AND MUST BE LEFT TO BE DETERMINED JUDICIALLY ON THE FACTS OF EACH CASE. THE COURT STATED :- IT MAY THEREFORE BE TAKEN AS SETTLED THAT A WRIT O F CERTIORARI COULD BE ISSUED TO CORRECT AN ERROR OF LAW. BUT IT IS ESSEN TIAL THAT IT SHOULD BE SOMETHING MORE THAN A MERE ERROR; IT MUST BE ONE WHICH MUST B E MANIFEST ON THE FACE OF THE RECORD. THE REAL DIFFICULTY WITH REFERENCE TO THIS MATTER, HOWEVER, IS NOT SO MUCH IN THE STATEMENT OF THE PRINCIPLE AS IN ITS APPLICA TION TO THE FACTS OF A PARTICULAR CASE. WHEN DOES AN ERROR CEASE TO BE MERE ERROR, A ND BECOME AN ERROR APPARENT ON THE FACE OF THE RECORD ? LEARNED COUNSEL ON EIT HER SIDE WERE UNABLE TO SUGGEST ANY CLEAR-CUT RULE BY WHICH THE BOUNDARY BETWEEN TH E TWO CLASSES OF ERRORS COULD BE DEMARCATED. 9. IN SATYANARAYAN LAXMINARAYAN HEGDE VS. MALLIKARJ UN BHAVANAPPA TIRUMALE [1960] 1 SCR 890, THIS COURT REFERRING TO BATUK K. VYAS AND HARI VISHNU KAMATH STATED AS TO WHAT CANNOT BE SAID TO BE AN ERROR APPARENT ON THE FACE OF THE RECORD. THE COURT OBSERVED : AN ERROR WHICH HAS TO BE ESTABLISHED BY A LONG DRA WN PROCESS OF REASONING ON POINTS WHERE THERE MAY CONCEIVABLY BE TWO OPINIONS CAN HARDLY BE SAID TO BE AN ERROR APPARENT ON THE FACE OF THE REC ORD. AS THE ABOVE DISCUSSION OF THE RIVAL CONTENTIONS SHOW THE ALLEGED ERROR IN THE PRESENT CASE IS FAR FROM SELF 8 EVIDENT AND IF IT CAN BE ESTABLISHED, IT HAS TO BE ESTABLISHED BY LENGTHY AND COMPLICATED ARGUMENTS. WE DO NOT THINK SUCH AN ERR OR CAN BE CURED BY WRIT OF CERTIORARI ACCORDING TO THE RULE GOVERNING THE POWE RS OF THE SUPERIOR COURT TO ISSUE SUCH A WRIT. 10. THUS, FOR AN ACTION UNDER SECTION 254(2) THERE HAD TO BE A MISTAKE APPARENT FROM RECORD. A LOOK AT THE RECORD MUST SHOW THAT THERE HAS BEEN AN ERROR AND THAT ERROR MAY BE RECTIFIED AS HELD BY THE HONBLE SUPREME COURT IN THE CASE OF CI T VS. KESHRI METAL PVT. LTD. 237 ITR 165 (SC) ONLY AN APPARENT ERROR OR FACT OF LAW CAN BE R ECTIFIED. NON-CONSIDERATION OF MATERIAL FACT WHICH GOES TO THE ROOT OF THE GROUND ITSELF IS THE MISTAKE APPARENT ON RECORD. THE DECISION OF THE HONBLE SUPREME COURT RELIED BY THE LD. A.R. IN THE CASE OF UDHAVDAS KEWALRAM VS. CIT, 66 ITR 462 HELD THAT THE TRIBUNAL MUST, IN DECIDING AN APPEAL, CONSIDER WITH DUE CARE ALL THE MATERIAL FACTS AND RECORD ITS FINDINGS AND ALL THE CONTENTIONS RAISED BY THE ASSESSEE AND REVENUE IN THE LIGHT OF EVIDENCE AND RELEVANT LAW. A DECIS ION HAS TO BE MADE ONLY ON THE BASIS OF THE FACTS INVOLVED THEREIN. IF THE FACTS ON THE BASIS OF WHICH A DECISION IS RENDERED ITSELF ARE FOUND TO BE DIFFERENT, IN OUR OPINION THERE IS BOUND TO BE A MISTAKE APPARENT ON RECORD AND THE PROVISIONS OF SECTION 254(2) ARE CLEARLY APPLICABLE. THE RECO RD IN OPINION MEANS THE ENTIRE RECORD CONSISTS OF NOT ONLY GROUNDS OF THE APPEAL AND THE CASE LAWS RELIED ON AND REFERRED TO BEFORE THE TRIBUNAL BUT ALSO THE CONTENTIONS, PLEAS AND THE ARGUMENTS R AISED BY THE PARTIES BEFORE THE TRIBUNAL. THE WORD RECORD HAS NOT BEEN DEFINED UNDER SECTION 25 4(2) OR UNDER SECTION 2 OF THE INCOME TAX ACT SO AS TO RESTRICT ITS MEANING ONLY TO THE GROUN DS OF APPEAL DECIDED IN THE ORDER OF THE TRIBUNAL. THE PROVISIONS OF SECTION 254(2) COULD NOT BE CONST ITUTED IN A MANNER THAT PRODUCE AN ANOMALY OR OTHERWISE PRODUCE IRRATIONAL OR ILLOGICAL RESULT . IT IS ONE OF THE BASIC PRINCIPLE AND LEGAL POLIC Y THAT WHEN THERE IS A POWER FOR RECTIFICATION OF A M ISTAKE APPARENT FROM RECORD THAT POWER SHOULD BE ALLOWED TO BE EXERCISED RECTIFYING A MISTAKE AND / OR ERROR FROM THE RECORD AND IF THE TRIBUNAL 9 FEELS THAT THE TRIBUNAL HAS COMMITTED AN ERROR, IT WOULD BE AGAINST THE CONCEPT OF JUSTICE AND FAIR PLAY AND ALSO AGAINST THE PRINCIPLE OF LEGAL POLICY NOT TO ALLOW TRIBUNAL TO EXERCISE SUCH POWER. SIMILAR VIEW HAS BEEN TAKEN BY THE JURISDICTIONAL H IGH COURT IN THE CASE OF ITO VS. ITAT, 58 ITR 634 (ALLD.) ON WHICH LD. A.R. VEHEMENTLY RELIE D, WHEREIN THE HIGH COURT HAS HELD THAT IF AN ERROR CREEPS IN AN ORDER SOLELY DUE TO TRIBUNALS O MISSION TO CONSIDER MATERIAL FACTS ON RECORD, IT IS AN ERROR APPARENT FROM THE RECORD AND CAN BE REC TIFIED UNDER SECTION 35 OF THE INCOME-TAX ACT, 1922 (SIMILAR TO SECTION 254(2)). SIMILAR VIEW HAS BEEN TAKEN BY THE HONBLE MADHYA PRADESH HIGH COURT IN THE CASE OF CIT VS. ITAT, 172 ITR 158 IN WHICH IT WAS HELD THAT MATERIAL FOR DETERMINING THE AMOUNT OF TAX IS PRESSED AND NOT CO NSIDERED, WOULD CERTAINLY CONSTITUTE A MISTAKE APPARENT FROM THE RECORD WITHIN THE MEANING OF SECTION 254 (2) OF THE ACT AND IF THE SAID MISTAKE BEING POINTED OUT BY THE ASSESSEE, THE TRIB UNAL, IN THE CIRCUMSTANCES REFERRED TO ABOVE, HAS TO AMEND ITS ORDER. HONBLE GUJARAT HIGH COURT IN THE CASE OF ACIT VS. SAURASHTRA KUTCH STOCK EXCHANGE LIMITED, 262 ITR 146 AT PAGE 155 HAS HELD AS UNDER :- THE PROPOSITION THAT A CONTENTION RAISED BUT NOT D EALT WITH BY THE TRIBUNAL SHOULD BE HELD TO HAVE BEEN NEGATIVE IS CO RRECT ONLY UP TO A STAGE. ONCE A PARTY BRINGS TO THE NOTICE OF THE TRIBUNAL THAT A N IMPORTANT POINT OR CONTENTION RAISED BY THE PARTY HAS NOT BEEN DEALT WITH IT WOUL D BE WITHIN THE JURISDICTION AND POWERS OF THE TRIBUNAL TO DECIDE WHETHER THE SAME C ONSTITUTES A MISTAKE APPARENT FROM THE RECORD AND THEREAFTER IT NECESSARY, REOPEN THE APPEAL. SUCH A POWER IS INHERENT IN THE TRIBUNAL, AS A PARTY HAS SUFFERED P REJUDICE DUE TO A LAPSE ON THE PART OF THE TRIBUNAL AND NOT ON ACCOUNT OF ANY FAUL T OF SUCH A PARTY. AN ACT OF THE TRIBUNAL SHOULD NOT PREJUDICE A PARTY SO AS TO FORC E THE PARTY INTO UNWARRANTED LITIGATION. 11. WE ALSO NOTED THAT THE HONBLE SUPREME COURT IN THE CASE OF HONDA SIEL POWER PRODUCTS LIMITED VS. CIT, 295 ITR 466 HAS OBSERVED THE SCOPE OF POWER OF RECTIFICATION THAT ONE OF THE REASON FOR GIVING THE POWER OF RECTIFICATION THE TR IBUNAL IS TO SEE THAT NO PREJUDICE IS CAUSED TO 10 EITHER OF THE PARTIES APPEARING BEFORE THE TRIBUNAL BY A DECISION BASED ON MISTAKE APPARENT FROM RECORD. WHEN PREJUDICE RESULTS FROM AN ORDER ATTRI BUTABLE TO THE TRIBUNALS MISTAKE, ERROR OR OMISSION, THEN IT IS THE DUTY OF THE TRIBUNAL TO SE T IT RIGHT. ATONEMENT TO THE WRONGED PARTY BY THE COURT OR THE TRIBUNAL FOR THE WRONG COMMITTED BY IT HAS NOTHING TO DO WITH THE CONCEPT OF INHERENT POWER OF REVIEW. THE LD. D.R. BEFORE US, NO DOUBT, VEHEMENTLY CONTENDED THAT RECALLING OF THE ORDER WILL TANTAMOUNT TO REVIEW OF THE ORDER BUT DID NOT CONTEND THAT THE ASSESSEE IS NOT RAISED THE CONTENTION BEFORE THE TRIBUNAL AT THE TI ME OF HEARING REGARDING THE SPECIFIC CHARGE BEING LEVIED BY THE A.O. FOR THE PURPOSE OF LEVY OF PENALTY UNDER SECTION 271(1)(C). THE AFFIDAVIT FILED BY THE ASSESSEE ALSO CONFIRMS THE S AME. WE ALSO NOTED THAT THE ASSESSEE HAS FILED THE COPY OF THE CASE OF THIS BENCH IN THE CASE OF M AHESH CHAND GUPTA VS. ITO 4(2), AGRA IN ITA NO. 118/AGRA/2005 WHICH IS AVAILABLE AT PAGE 62 TO 67 OF THE PAPER BOOK. THIS JUDGMENT, IN OUR OPINION, RELATES TO THE SAME ISSUE, BUT HAS NOT BEE N CONSIDERED BY THIS TRIBUNAL. WE HAVE GONE THROUGH THE DECISION OF THE GUJARAT HIGH COURT IN T HE CASE OF MANU ENGINEERING WORKS 122 ITR 306 (GUJ), NEW SORATHIA ENGINEERING CO. VS. CIT, 28 2 ITR 642 (GUJ.) AND THAT OF GAUHATI HIGH COURT IN THE CASE OF PADMA RAM BHARALI, 110 ITR 54 (GAUHATI) AND IN THESE DECISIONS, IT WAS HELD THAT IT IS INCUMBENT UPON THE A.O. TO STATE WH ETHER PENALTY WAS BEING LEVIED FOR CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS OF INCOME. EVEN OTHERWISE ALSO, CONCEALMENT OF INCOME IS A DIFFERENT CHARGE IF COMP ARED WITH FURNISHING OF INACCURATE PARTICULAR OF INCOME. EXPLANATION 1 TO SECTION 271(1)(C) WHIC H CREATES A LEGAL FICTION RAISES PRESUMPTION AGAINST THE ASSESSEE RELATE TO THE CONCEALMENT OF T HE PARTICULARS OF THE INCOME IS NOT APPLICABLE IN RESPECT OF FURNISHING OF THE INACCURATE PARTICULARS OF INCOME. HONBLE SUPREME COURT HAS ALSO NOTED THIS FACT IN THE DECISION OF RELIANCE PETROPR ODUCT, 322 ITR 158 (SC) IN WHICH IT WAS HELD MERE MAKING OF THE CLAIM (WHICH IS NOT SUSTAINABLE IN LAW) WILL NOT AMOUNT TO INACCURATE CLAIM 11 OR FURNISHING OF INACCURATE PARTICULARS REGARDING T HE INCOME OF THE ASSESSEE. EXPLANATION 1 TO SECTION 271(1)(C) CANNOT BE APPLIED WHERE CHARGE AG AINST THE ASSESSEE FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME SINCE IT PROVIDES A DEEMING FICTION QUA CONCEALMENT OF PARTICULARS OF INCOME ONLY AND CONSEQUENTLY CANNOT BE EXTENDED TO A CASE WHERE CHARGE AGAINST THE ASSESSEE IS OF FURNISHING INACCURATE PARTICULAR S OF INCOME. WHERE CHARGE AGAINST THE ASSESSEE IS CONCEALMENT OF PARTICULARS OF INCOME, THE A.O. H AS TO ESTABLISH THAT THE ASSESSEE HAS NOT DISCLOSED THE PARTICULARS OF INCOME UNDER THE MAIN PROVISION FOR THE CASE OF THE ASSESSEE FALLS WITHIN THE DEEMING FICTION CREATED UNDER EXPLANATIO N TO SECTION 271(1)(C). WE HAVE ALSO GONE THROUGH THE DECISION OF ALLAHABAD HIGH COURT (JURIS DICTIONAL HIGH COURT) IN THE CASE OF LAXMI ELECTRONIC CORPORATION VS. CIT (SUPRA), ON WHICH TH E LD. AR VEHEMENTLY RELIED. IN THIS CASE, THE HONBLE COURT HAS HELD AS UNDER : THE APPELLATE TRIBUNAL HAS NO POWER TO REVIEW. ITS ONLY POWER TO IS ONE OF RECTIFICATION CONFERRED BY SUB-SECTION (2) OF SE CTION 254 OF THE INCOME-TAX ACT, 1961. IT IS A WELL-SETTLED PROPOSITION THAT AN ACT OF CO URT (WHICH MEANS AND INCLUDES A TRIBUNAL OF THE NATURE OF THE INCOME-TAX APPELLATE TRIBUNAL) SHOULD NOT PREJUDICE A PARTY. IN SUCH A CASE, IT WOULD NOT BE JUST TO DRIVE THE PARTY TO A REFERENCE UNDER SECTION 256 OF THE ACT. IT MUST BE LEFT TO THE TRIBUNAL TO REOPEN AN APPEAL IF IT FINDS THAT IT HAS OMITTED TO DEAL WITH AN IMPORTANT GROUND URGED BY THE PARTY. WHERE THE TRIBUNAL FAILS OR OMITS TO DEAL WITH AN IMPORTANT CONTENTION AFFECTING THE MAINTAINABILITY / MERITS OF AN APPEAL , IT MUST BE DEEMED TO BE A MISTAKE APPARENT FROM THE RECORD WHICH EMPOWERS THE TRIBUNAL TO REOPEN THE APPEAL AND RECTIFY THE SAME IF IT IS SO SATISFIED. THE EXPRESSION RECORD IN THE PHRASE MISTAKE APP ARENT FROM THE RECORD IN SECTION 254(2) DOES NOT MEAN ONLY THE JU DGMENT. THE RECORD MEANS THE RECORD BEFORE THE TRIBUNAL. THE COMMISSIONER REVISED, UNDER SECTION 263, THE O RDERS OF ASSESSMENT RELATING TO THE ASSESSMENT YEAR 1981-82. ON APPEAL TO THE TRIBUNAL BY THE ASSESSEE, THE REVENUE RAISED A PRELIMINARY OBJECTIO N THAT THE APPEALS WERE BARRED BY TIME. THE ASSESSEE CONTENDED THAT THE ORDERS OF THE COMMISSIONER UNDER 12 SECTION 263 WERE BARRED BY TIME. THE TRIBUNAL DISPO SED OF THE APPEALS. BOTH THE REVENUE AND THE ASSESSEE FILED APPLICATIONS FOR REO PENING THE APPEALS AND FOR THEIR REHEARING. THE REVENUE CONTENDED THAT IT HAD RAISED A PRELIMINARY OBJECTION AS TO THE MAINTAINABLE OF THE APPEAL ON THE GROUND OF LIMITATION, WHICH THE TRIBUNAL HAD FAILED TO DEAL WITH IN ITS JUDGMENT. T HE ASSESSEE CONTENDED THAT IT HAS RAISED SEVERAL CONTENTIONS, BUT THE TRIBUNAL DE ALT WITH ONLY ONE OF THE CONTENTIONS, NAMELY, WHETHER THE COMMISSIONERS ORD ERS WERE BARRED BY TIME, AND DID NOT DEAL WITH THE OTHER CONTENTIONS. THE TR IBUNAL FOUND THAT THE REVENUE HAD RAISED A PRELIMINARY OBJECTION WHICH WAS NOT NO TICED IN ITS JUDGMENT AND, THEREFORE, REOPENED THE APPEALS HEARD THE PARTIES A ND DISMISSED THE APPEALS AS BARRED BY TIME. IN THAT VIEW OF THE MATTER, THE TRI BUNAL DID NOT GO INTO THE MERITS OF THE CONTENTIONS URGED BY THE ASSESSEE. ON A REFE RENCE UNDER SECTION 256(2) : HELD, (I) THAT THE PROPOSITION THAT A CONTENTION URGED BU T NOT DEALT WITH BY THE TRIBUNAL CAN BE TAKEN AS HAVING BEEN NAGATIVED, IS NOT INCONSISTENT WITH THE POWER OF THE TRIBUNAL TO REOPEN THE APPEAL WHERE IT IS BROUGHT TO ITS NOTICE THAT AN IMPORTANT CONTENTION RAISED BY THE PARTY WAS NOT DEALT WITH BY THE TRIBUNAL IN ITS ORDER. SUCH A POWER MUST BE HELD TO BE INHERENT IN THE TRIBUNAL, SINCE IT WOULD BE A CASE WHERE THE PARTY HAS SUFFERED PREJUDICE FO R NO FAULT OF HIS AND ON ACCOUNT OF A MISTAKE OR ERROR ON THE PART OF THE TRIBUNAL. (II) THAT THE FAILURE TO DEAL WITH THE PRELIMINAR Y OBJECTION RELATING TO THE MAINTAINABLE OF THE APPEAL ON THE GROUND OF LIMITAT ION AMOUNTED TO AN ERROR APPARENT ON THE FACE OF THE RECORD WHICH EMPOWERED THE TRIBUNAL TO REOPEN THE APPEAL AND RECTIFY THE MISTAKE IF IT WAS SO SATISFI ED. 12. WE, THERE FORE, IN VIEW OF AFORESAID BINDING PR ECEDENTS, ARE OF THE VIEW THAT A MISTAKE HAS CREPT INTO THE ORDER OF THIS TRIBUNAL DT. 27.04.07 AND ACCORDINGLY WE, RECTIFY THE ORDER DATED 27.04.2007 IN THE FOLLOWING MANNER BY ALLOWING THE MISC. APPLICATION FILED BY THE ASSESSEE AS UNDER :- 13. IN PARA 8 OF THE ORDER DATED 27.04.2007, AFTER THE SENTENCE HE ALSO PLACED RELIANCE ON SEVERAL OTHER DECISIONS OF ITAT IN SUPPORT OF HIS C ONTENTION THAT PENALTY WAS NOT EXIGIBLE IN THE CASES WHERE ASSESSEE SURRENDERED THE AMOUNT TO BUY PEACE FOLLOWING PARAGRAPH BE SUBSTITUTED :- 13 THE LD. A.R. BEFORE US FURTHER CONTENDED THAT THE A.O. WAS NOT CORRECT IN IMPOSING THE PENALTY UNDER SECTION 271(1)(C). HE REFERRED TO TH E NOTICE ISSUED UNDER SECTION 271(1)(C) OF THE ACT AND POINTED OUT THAT THE A.O. HAS NOT MADE OUT THE SPECIFIC CHARGE FOR WHICH THE PENALTY HAS BEEN LEVIED. HE HAS ALSO DRAWN OUR ATTENTION TOWAR DS THE PENALTY ORDER PASSED UNDER SECTION 271(1)(C) OF THE ACT. RELIANCE WAS PLACED IN THIS REGARD BY HIM ON THE FOLLOWING DECISIONS:- 1) CIT VS. MANU ENGINEERING WORKS, 122 ITR 306 (GUJ ) 2) NEW SORATHIA ENGINEERING CO. VS. CIT, 282 ITR 64 2 (GUJ) 3) MUKESH CHANDRA A. LAKDAWALA VS. ITO (2010) 4 ITR (TRIB) 307 (AHMEDABAD) 4) NAVINBHAI M. PATEL VS. ITO, 31 TTJ (AHD) 40 5) DECISION OF ITAT AGRA BENCH IN THE CASE OF SATNA M KALRA VS. ACIT IN ITA NO.53/AGRF/2006 6) DECISION OF ITAT AGRA BENCH (SMC) IN THE CASE OF MAHESH CHAND GUPTA VS. ITO 4(2) IN ITA NO.118/AGRF/2006. 14. IN PARA 15, AFTER THE SENTENCE IN THESE CASES, APPLICATION OF EXPLANATION 1 HAS BEEN APPROVED BY THE HONBLE APEX COURT, FOLLOWING LINE S BE DELETED : THE FACTS OF THE CASE BEFORE US ARE, THUS, SQUARE LY COVERED BY THE EXPLANATION 1 OF THE ACT. ACCORDINGLY, WE ARE OF THE CONSIDERED VIEW THA T PENALTY U/S. 271(1)(C) IS EXIGIBLE. ACCORDINGLY, WE DO NOT FIND ANY INFIRMITY IN CONFIR MING OF THE PENALTY IMPOSED BY ASSESSING OFFICER. 15. IN PLACE OF PARA 16, FOLLOWING PARAGRAPHS BE SU BSTITUTED : 16. NOW COMING TO THE CONTENTION OF THE ASSESSEE T HAT THE ASSESSING OFFICER MUST LEVY THE SPECIFIC CHARGE ON THE ASSESSEE WHETHER THE ASSESSEE HAS CONCEALED THE 14 PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTI CULARS OF SUCH INCOME, WE WOULD LIKE TO REFER TO THE PROVISIONS OF SECTION 271(1)(C) WHICH LAYS DOWN AS UNDER : 271.(1) IF THE ASSESSING OFFICER OR THE COMMISSION ER (APPEALS) [OR THE COMMISSIONER] IN THE COURSE OF ANY PROCEEDINGS UNDE R THIS ACT, IS SATISFIED THAT ANY PERSON - (A) .. (B) .. (C) HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME, OR (D) .. HE MAY DIRECT THAT SUCH PERSON SHALL PAY BY WAY OF PENALTY, - EXPLANATION 1- WHERE IN RESPECT OF ANY FACTS MATERI AL TO THE COMPUTATION OF THE TOTAL INCOME OF ANY PERSON UNDER THIS ACT, - (A) SUCH PERSON FAILS TO OFFER AN EXPLANATION OR OF FERS AN EXPLANATION WHICH IS FOUND BY THE ASSESSING OFFICER OR THE COMMISSIONER (APPEA LS) OR THE COMMISSIONER TO BE FALSE OR (B) SUCH PERSON OFFERS AN EXPLANATION WHICH HE IS N OT ABLE TO SUBSTANTIATE AND [FAILS TO PROVE THAT SUCH EXPLANATION IS BONA FIDE AND THA T ALL THE FACTS RELATING TO THE SAME AND MATERIAL TO THE COMPUTATION OF HIS TOTAL INCOME HAV E BEEN DISCLOSED BY HIM], THEN, THE AMOUNT ADDED OR DISALLOWED IN COMPUTING T HE TOTAL INCOME OF SUCH PERSON AS A RESULT THEREOF SHALL, FOR THE PURPOSES OF CLAUSE (C ) OF THIS SUB-SECTION BE DEEMED TO REPRESENT THE INCOME IN RESPECT OF WHICH PARTICULAR S HAVE BEEN CONCEALED. 17. FROM THE PERUSAL OF SECTION 271(1)(C), IT IS NE CESSARY THAT THE SATISFACTION SHOULD HAVE BEEN ARRIVED AT BY THE A.O. OR THE COMM ISSIONER (APPEALS) OR THE COMMISSIONER DURING THE COURSE OF PROCEEDINGS UNDER THE INCOME-TAX ACT THAT THE ASSESSEE HAS CONCEALED THE PARTICULARS OF HIS INCOM E OR FURNISHED INACCURATE PARTICULAR OF SUCH INCOME. THE PENALTY UNDER THIS SECTION CAN BE LEVIED ON TWO CHARGES I.E. FOR CONCEALMENT OF PARTICULARS OF INCOME OR FOR FURNISH ING OF INACCURATE PARTICULARS OF INCOME. IF THE PENALTY PROCEEDINGS ARE INITIATED O N THE CHARGE OF CONCEALMENT OF PARTICULARS OF INCOME THEN PENALTY CANNOT BE LEVIED FOR CHARGE OF FURNISHING OF INACCURATE PARTICULARS OF INCOME AND VISE VERSA. THIS WAS SO HELD BY THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. LAKHDIR LALJI, 85 ITR 77 (GUJ.). IN VIEW OF PROVISIONS OF 15 SECTION 271(1)(C), WE ARE OF THE VIEW THAT THERE MU ST BE CLEAR FINDING ABOUT THE CHARGE OF THE PENALTY. IT IS INCUMBENT ON THE A.O. OR THE OF FICER IMPOSING THE PENALTY TO STATE WHETHER THE PENALTY WAS BEING LEVIED FOR CONCEALMEN T OF PARTICULARS OF INCOME OR FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. IN THE ABSENCE OF SUCH A FINDING, AN ORDER PASSED BY THE CONCERNED AUTHORITY IMPOSING PENALTY UNDER SECTION 271(1)(C) WILL BE VOID. THIS VIEW HAS BEEN TAKEN IN THE FOLLOWING CASE BY T HE HIGH COURTS :- I) CIT VS. MANU ENGINEERING WORKS, 122 ITR 306 (GUJ ) II) NEW SORATHIA ENGINEERING CO. VS. CIT, 282 ITR 6 42 (GUJ) III) PADMA RAM BHARALI VS. CIT, 110 ITR 54 (GAUHATI ) 18. IN THIS CASE, WE NOTED FROM THE PENALTY ORDER P LACED BEFORE US THAT THE A.O. HAS NOT BROUGHT OUT ANY SPECIFIC CHARGE FOR WH ICH THE PENALTY HAS BEEN IMPOSED ON THE ASSESSEE UNDER SECTION 271(1)(C). HE HAS SIMPL Y MENTIONED THAT THE ASSESSEE HAS COMMITTED DEFAULT WITHOUT ANY REASONABLE CAUSE IN C ONCEALING THE INCOME AND FURNISHING INACCURATE PARTICULARS OF SUCH INCOME. THIS FACT I S APPARENT FROM THE FINDING OF THE A.O. GIVEN AT PAGE 2 PARAGRAPH 3 OF THE ORDER REPRODUCE D HEREINABOVE. THE WORD CONCEAL AS PER WEBSTER DICTIONARY MEANS TO HIDE, WITH DRAW OR REMOVE FROM OBSERVATION, COVER OR KEEP AWAY FROM SIGHT, TO KEEP SECRET, TO AVOID D ISCLOSING OR DIVULGING. THAT MEANS NON-DISCLOSURE OF PARTICULARS OF INCOME, ON THE OTH ER HAND, WHERE THE PARTICULARS ARE DISCLOSED BUT SUCH DISCLOSURE IS NOT CORRECT AND TR UE OR ACCURATE, IT WOULD AMOUNT TO FURNISHING OF INACCURATE PARTICULARS OF INCOME. FO R EXAMPLE, IN A CASE OF A BUSINESSMAN EVEN THE PARTICULAR TRANSACTION OF SALE IS NOT SHOW N IN THE BOOKS IT WOULD AMOUNT TO CONCEALMENT OF PARTICULARS OF INCOME WHILE THE SALE IS SHOWN BUT ADDED A LESSER VALUE, IT WOULD AMOUNT TO FURNISHING OF INACCURATE PARTICULAR S OF INCOME. IT IS PERTINENT TO NOTE THAT THRUST OF LEVY IS UPON THE PARTICULARS OF INCO ME WHICH ARE EITHER CONCEALED OR 16 FURNISHED INACCURATELY BY THE ASSESSEE. THE EXPRES SION PARTICULARS REFER TO THE FACTS, DETAILS, SPECIFIC OR THE INFORMATION ABOUT SOMEONE OR SOMETHING. THUS, THE DETAILS OR INFORMATION ABOUT THE INCOME WOULD DEAL WITH FACTUA L DETAILS OF THE INCOME AND CANNOT BE UNDERSTOOD TO AREAS WHICH ARE SUBJECTIVE SUCH AS ST ATUS OF TAXABILITY OF AN INCOME, ADMISSIBILITY OF DEDUCTION AND INTERPRETATION OF LA W. THE HONBLE SUPREME COURT IN THE DECISION OF CIT VS. RELIANCE PETROPRODUCTS PVT. LTD ., 322 ITR 158 (SC) HAS LAID DOWN THAT AS PER LAW LEXICON THE MEANING OF THE WORD PA RTICULARS IS DETAIL OR DETAILS (IN PLURAL SENSE), THE DETAILS OF A CLAIM OR SUPPORTING ITEMS OF AN ACCOUNT. THUS, IT WAS HELD THAT THE MEANING OF THE WORD PARTICULARS USED IN SECTION 2 71(1)(C) WOULD EMBRACE THE DETAILS OF THE CLAIM MADE. 19. WE MAY POINT OUT AT THIS STAGE THAT THE EXAPLAN ATION-1 TO SECTION 271(1)(C) IS APPLICABLE ONLY FOR CONCEALMENT OF PARTICULARS O F INCOME. IT CANNOT BE APPLIED WHERE CHARGE AGAINST THE ASSESSEE IS FOR FURNISHING OF IN ACCURATE PARTICULARS OF INCOME. WHERE THE CHARGE AGAINST THE ASSESSEE IS CONCEALMENT OF P ARTICULARS OF INCOME, THE ONUS IS ON THE A.O. TO ESTABLISH EITHER THAT THE ASSESSEE HAS NOT DISCLOSED THE PARTICULARS OF INCOME UNDER THE MAIN PROVISIONS OR THE CASE OF THE ASSESSEE FAL LS WITHIN THE EXPLANATION GIVEN UNDER SECTION 271(1)(C). EXPLANATION 1 TO SECTION 271(1) (C) STATES THAT THE AMOUNT ADDED OR DISALLOWED IN COMPUTING THE TOTAL INCOME OF THE ASS ESSEE SHALL BE DEEMED TO BE THE INCOME IN RESPECT OF WHICH PARTICULARS HAVE BEEN CO NCEALED. THIS DEEMING PROVISION IS NOT ABSOLUTE ONE BUT IS REBUT TABLE ONE. IT ONLY S HIFTS THE ONUS ON THE ASSESSEE. EXPLANATION 1 REFERS TO THE TWO SITUATIONS IN WHICH PRESUMPTION OF THE CONCEALMENT OF THE PARTICULARS OF INCOME IS DEEMED. THE FIRST SITUATI ON IS WHERE THE ASSESSEE IN RESPECT OF 17 ANY FACT MATERIAL TO THE COMPUTATION OF HIS TOTAL I NCOME FAILS TO OFFER AN EXPLANATION OR OFFERS AN EXPLANATION, WHICH IS FOUND BY THE A.O. O R THE COMMISSIONER TO BE FALSE. THE SECOND SITUATION IS WHERE THE ASSESSEE IN RESPECT O F ANY FACTS MATERIAL TO THE COMPUTATION OF HIS TOTAL INCOME OFFERS AN EXPLANATION, WHICH TH E ASSESSEE IS NOT ABLE TO SUBSTANTIATE AND ALSO FAILS TO PROVE THAT SUCH EXPLANATION WAS B ONAFIDE ONE AND THAT ALL THE FACTS RELATING TO THE COMPUTATION OF TOTAL INCOME HAVE BE EN DISCLOSED BY HIM. THE PRESUMPTION AVAILABLE UNDER EXPLANATION TO SECTION 271(1)(C), C ANNOT BE DRAWN UNLESS THE CASE OF THE ASSESSEE FALLS UNDER EITHER OF THE CLAUSES (A) OR ( B). THIS EXPLANATION, THEREFORE, DOES NOT AND CANNOT APPLY TO THE CASE WHERE ADDITION/DISALLO WANCE HAS BEEN MADE BY REJECTION OF LEGAL CLAIM MADE BY THE A.O. BONAFIDE OF LEGAL CLA IM IS NOT THE SUBJECT MATTER OF THE EXAPLANATION-1. THEREFORE, HONBLE SUPREME COURT I N THE CASE OF RELIANCE PETROPRODUCTS (SUPRA) HAS HELD THAT MERE REJECTION OF LEGAL CLAIM WOULD NOT INVITE PENALTY. THIS WOULD ALSO APPLY WHERE THE CHARGE AGAINST THE ASSESSEE IS CONCEALMENT OF PARTICULARS OF INCOME. IF WE LOOK AT THE PROVISIONS OF SECTION 271(1)(C) AND EXPLANATION-1 FROM A DIFFERENT ANGLE, THE A.O. IS BOUND TO BRING ON RECO RD SPECIFIC CHARGE AGAINST THE ASSESSEE WHETHER THE ASSESSEE HAS CONCEALED THE PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME. IN THE CASE OF CONCEALMENT OF PARTICULARS OF INCOME, INITIAL ONUS WILL GET SHIFTED ON THE ASSESSEE TO PROVE THAT HE H AS NOT CONCEALED THE PARTICULARS OF INCOME DUE TO THE APPLICABILITY OF EXPLANATION I. WHILE, IN THE CASE OF FURNISHING OF INACCURATE PARTICULARS OF INCOME, THE ONUS REMAINS ON THE REVENUE TO PROVE THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF IN COME. IF THE A.O. FAILED TO BRING OUT OR LEVY SPECIFIC CHARGE ON THE ASSESSEE, THE PENALTY I MPOSED CANNOT BE SUSTAINED. OUR 18 AFORESAID VIEW IS DULY SUPPORTED BY THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF NEW SORATHIA ENGINEERING CO. LTD., 282 ITR 642 IN WHICH IT WAS HELD AS UNDER :- IT IS INCUMBENT UPON THE ASSESSING OFFICER TO STAT E WHETHER THE PENALTY WAS BEING LEVIED FOR CONCEALMENT OF PARTICULARS OF INCOME BY THE ASSESSEE OR WHETHER ANY INACCURATE PARTICULARS OF INCOME HAD BEEN FURNISHED BY THE ASSESSEE. --------------------------------------------------- ------------------------ --------------------------------------------------- ------------------------ HELD, THAT THE PENALTY ORDER AND THE ORDER OF THE C OMMISSIONER (APPEALS) SHOWED THAT NO CLEAR CUT FINDING HAD BEEN REACHED. THE TRI BUNAL HAD FAILED TO APPRECIATE THIS LEGAL. ISSUE. THE RATIO IN CIT V. MANU ENGINE ERING WORKS 122 ITR 306(GUJ) WAS APPLICABLE AND THE ORDER OF PENALTY COULD NOT B E UPHELD BY THE TRIBUNAL. THE ORDER WAS INVALID. SIMILAR VIEW HAS BEEN TAKEN BY THE TRIBUNAL IN THE FOLLOWING CASES :- I) ITO VS. SMT. LALITA IN ITA NO.433/AGR/2009 FOR A .Y. 1998-99 II) KM. RUCHI RATHORE VS. ITO IN ITA NO.97/AGR/2007 FOR A.Y. 1998-99 III) SMT. RAJ RANI MITTAL VS. ITO IN ITA NO.2275/DE L/2009 OF ITAT DELHI BENCH A IV) ACIT VS. DR. S.D. MAURYA IN ITA NO.619/AGR/2008 FOR A.Y. 2003-04 V) MUKESH CHANDRA A. LAKDAWALA VS. ITO (2010) 4 ITR (TRIB) 307 (AHMEDABAD) VI) NAVINBHAI M. PATEL VS. ITO, 31 TTJ (AHD) 40 VII) DECISION OF ITAT, AGRA BENCH IN THE CASE OF SA TNAM KALRA VS. ACIT IN ITA NO.53/AGRF/2006 VIII) DECISION OF ITAT, AGRA BENCH (SMC) IN THE CAS E OF MAHESH CHAND GUPTA VS. ITO 4(2) IN ITA NO.118/AGRF/2006 IX) DECISION OF ITAT, AGRA BENCH IN THE CASE OF M/S. BA JWA RUBBER INDUSTRIES VS. DCIT IN ITA NOS.01/AGR/2010 & 478/AGR/2009. X) DECISION OF ITAT , AGRA BENCH IN THE CASE OF ITO 4 (2) , AGRA VS. DR. HARENDRA KUMAR GUPTA IN ITA NOS. 125 TO 128 /AGR/2003. 20. ON THE BASIS OF THE AFORESAID CASES, WE ARE OF THE VIEW THAT THE PENALTY IS LIABLE TO BE ANNULLED. WE ACCORDINGLY CANCEL THE PENALTY IMP OSED UNDER SECTION 271(1)(C). 21. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED 19 21. IN THE RESULT, THE MISCELLANEOUS APPLICATION F ILED BY ASSESSEE IS ALLOWED BY RECTIFYING THE ORDER DT. 27.4.2007 IN THE AFORESAID MANNER. ORDER PRONOUNCED IN THE OPEN COURT ON 28.07.11. SD/- SD/- (H.S. SIDHU) (P.K. BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 28 TH JULY, 2011 *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, AGRA 6. GUARD FILE ASSISTANT REGISTRAR TRUE COPY